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What would be the compound interest on Rs 4200 for 18 months at 10% per annum compounded half-yearly? - Mathematics and Statistics

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Sum

What would be the compound interest on Rs 4200 for 18 months at 10% per annum compounded half-yearly?

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Solution

Principal P = ₹ 4200

Rate of interest R = 10%

Duration T = 18 months = 1.5 years compounding is done half-yearly

A = P`(1 + ("R"/2)/100)^("2T")`

= `4200(1 + 10/200)^3`

= `4200(21/20)^3`

= `(4200 xx 21^3)/20^3`

= `(4200 xx 21)/2000`

= 4862.025

I = A – P

= 4862.025 – 4200

= 662.025

∴ Compound interest would be ₹ 662.025.

Concept: Simple and Compound Interest (Entrance Exam)
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